Lawrence and Douglas County

City says 9th, N.H. hotel project making progress

New plans for a multistory hotel project at Ninth and New Hampshire streets are moving in the right direction, Lawrence city commissioners indicated Tuesday.

“This is a process in my opinion that is working,” Mayor Bob Schumm said. “It is not complete yet. It is still a process that has more opportunity and agony to go. So hang in there.”

A development group led by Lawrence businessmen Doug Compton and Mike Treanor on Monday confirmed they have agreed to reduce the height of a proposed hotel/retail building on the southeast corner of Ninth and New Hampshire streets by one story.

On Tuesday, city commissioners received a brief presentation on the project, which is slated to be heard by the city’s Historic Resources Commission at a special meeting Monday.

Commissioners took no votes related to the proposed design of the building but did tell members of the crowd that the design was changed after the developers were informed a larger version of the project likely did not have enough votes to win approval.

“I have been concerned about the project all along in terms of its size and its financial aspects,” Schumm said.

The previous design called for the building to include hotel, apartment and retail uses. It would have been six stories tall at the corner of Ninth and New Hampshire and five stories along much of its western edge that faces New Hampshire Street.

The newly proposed design will reduce the height by one story along the western edge and will remove the apartment use from the project. The eastern edge of the building — the edge closest to a historic neighborhood along Rhode Island street — is proposed to be three stories tall.

Neighbors on Tuesday didn’t offer any specific comments related to the new design but told commissioners they thought the project was moving much too quickly with the specially scheduled Historic Resources Commission meeting set for Monday.

“We want it to slow down so we can sit down and really talk about what these plans mean,” said Katherine Harris, who lives just east of the location for the project.

Monday’s Historic Resources Commission meeting will focus only on the proposed building for the southeast corner of the intersection. The development group on Monday also confirmed that it hopes to build a multistory apartment building, likely with 90 to 120 apartments, on the northeast corner of the intersection, where Black Hills Energy currently has its offices.

But Lawrence attorney Dan Watkins, who is representing the developers, said plans for that project haven’t yet been filed and likely won’t be anytime soon.

A spokesman for Black Hills on Tuesday confirmed the natural gas utility was in the process of finalizing a deal to transfer the property over to Compton’s First Management Inc. Black Hills then would move into First Management’s executive offices on North Iowa Street.

Black Hills spokesman Curt Floerchinger said he didn’t yet have a timeline for when the office may move because the deal has not yet been finalized. But Floerchinger said the company does plan to move its maintenance operations from its shop facility near Eighth and Delaware streets. The new North Iowa Street facility will allow the administrative offices and operations division of the company to be located at the same site.

“Our goal in relocating is to bring the office and operations personnel together,” Floerchinger said. “When they are separated, it does create some challenges.”

But Floerchinger said Black Hills will maintain ownership of the east Lawrence maintenance shop property, which is near the rapidly redeveloping area surrounding the Poehler building.

Many states have passed laws to prevent TIF funding for viable projects, it was created in California to help develop blighted areas. California was the first to pass a law preventing it from being used as a handout to well-connected developers on valuable real estate. Lawrence has 2 of the 17 TIF districts in Kansas, they are in 2 of the most valuable real estate locations in town. People go crazy when they hear of a 1% increase in taxes for public transit, schools, etc.,but this money goes straight to some of our most wealthy citizens, and gets little mention . Some say you have a choice to spend there, I would be confident 98% that spend in these districts have no idea they are donating money/paying extra to pad personal bank accounts.
The projects may be good, but they don't meet the intended requirements for TIF.

Had the Olive Garden project gone forward, it "may" have produced a "projected" amount of tax revenue, an "estimated" number of jobs and "perhaps" a certain amount of associated business activity. Had the Masonic Temple project gone forward, "may", "maybe", "projected", etc. Now both projects are dead in the water and the city is getting the smallest amount of tax revenue possible. And "if" this vacant lot remains a vacant lot, "then" the revenue "projected" for the city "will be" the lowest amount possible.
It "seems" that in a collective desire to not help a well heeled developer, we've shot ourselves in the foot.
Now I must admit that I have a job and have weathered this recession. And as I note this recovery has been slow, sputtering at times, rather than blame Obama or Brownback, I'd rather think locally and blame the slow recovery on obstructionists who would rather shoot themselves in the foot than have someone pump millions into the local economy just because he will make a profit.

None of your arguments are new - they're just the same old ones we've hashed out before.

I don't believe the city should be gambling with our tax dollars - I believe they should be using them to provide infrastructure and basic services for city residents.

Private individuals and groups of them are free to gamble, in order to make a profit - that's how the private sector should work. That includes a possibility that their investment won't pay off - that's the flip side of profit.

In addition, I think there must be something wrong with our laws, such that somebody can own a building like the Masonic Temple for so long, and let it sit and get blighted, without any consequences.

When that happens, normal market forces don't exert the pressure they're supposed to exert, and instead of lowering rents/sale prices/etc. we continue to have many vacancies while prices remain relatively constant.

Generally speaking, I think that things should operate the way they're designed to and intended to operate - the government should operate in the public good, as a non-profit entity, and the private sector should operate according to market forces, competition, etc.

Thinking down the line ...
Carpenters not hired, not earning a wage, not paying income taxes. Not shopping at local clothing stores, not eating at local restaurants. Those stores, not paying taxes for their services. Not hiring staff to serve their now non customers. Those non staff not earning wages and not paying taxes.
Not only carpenters, but plumbers and electricians. Laborers also, all not earning wages, not paying taxes.
Millions of dollars not being infused into the local economy at a time when we really need money being infused into the local economy, into the local tax base.
Looking down the line ...
The tax base will be a certain size. Decisions will need to be made. Some money will go to fixing roads, some to schools, some to senior services, some to other services, such as Cottonwood and the like. Because of the obstructionist attitude that all too often prevails, the available funds will be somewhat less. Cuts will be necessary. Maybe to roads. Maybe to schools. Maybe to Cottonwood.
As I've said before, I have no interest in this project or in any other I've mentioned. No carpenters in my circle of friends or family. No plumbers, etc. No one at Cottonwood. Nothing of the sort. Yet I believe places like Cottonwood deserve adequate funding. Same with schools. I would also like good roads. The money has to come from somewhere. And maybe to get that, I'm willing to compromise. Maybe you're not. Just remember that when you hit that huge pothole. Remember your non willingness to compromise when dollars are not available for schools (I recall you saying you have no children so you won't be personally affected), and remember your unwillingness to compromise when Cottonwood's budget is cut. Obstructionist attitudes will be part of the reason.

That seems completely adequate (more so, in fact) for a town of this size to me.

I'm not sure why you want to characterize not subsidizing businesses as "obstructionist". Any business that wants to do business is welcome to do so, providing they do so within the appropriate guidelines. What people object to is businesses trying to change zoning requirements, build larger than acceptable structures, get a variety of tax breaks, etc.

Any idea where we're spending that ridiculous amount of money now? Streets should be well repaired already, don't you think?

I recall voting in favor of a bond issue for the school district for "capital improvements" - it was marketed as being needed to repair and upgrade buildings, classrooms, etc. Somewhere around $2 million of that wound up being used for athletic fields.

Unfortunately, I won't be so quick to vote for the next school bond issue as a result.

Let me ask you a hypothetical question, Jafs. Suppose the local government that you live in offered you a $100 tax break, however, that caused the federal government to raise your tax burden by $100. How would you feel? Me, I'd feel ambivalent. I certainly wouldn't feel either good or bad.
Now let me propose something to you. You have stated that you believe local government should not take certain risks. However, what if that attitude caused county government to assume greater risk? or if it caused state or federal government to assume greater risk? Does it really matter which government entity is assuming the risk?
So you say that giving developers tax breaks is too risky. But if any or all of the projects we routinely talk about were to go forward, what we know for sure is that a good deal of money will go into the hands of blue collar workers. That lessens the chances of those workers going on unemployment. Now, sure, you might say that unemployment doesn't come from the city, it comes from other government sources. But does that really matter? All you've done is pass the risk from city to county, county to state, state to federal. But the risk you are so averse to still exists.
So Cottonwood gets it's money from one source, unemployment from some other source, and the city keeps it's tax base at the lowest possible rate while the risk doesn't go away. It's just transferred.
Now the culture you speak of is something I might agree with, if we lived in a vacuum. If I knew for certain that other cities and other states weren't actively trying to recruit business, I'd say sure. But that's not the case. (And it raises the question, if these incentives are inherently bad, why are so many cities and states trying to lure business there with incentives?).
Don't you think Lawrence is making school building decisions based on projections of what will be needed in the future? The new library will be used by a projected number of people, in spite of technology changes that might cause those projections to be wildly off base. These things are surely done all the time. Now, I've never said give them incentives. I've said give it to them if it makes sense for the city. But simply discarding projections is like having a tool and refusing to use it. Does that make sense?

I think government at all levels shouldn't be involved in this sort of risk taking - providing unemployment benefits is rather different from getting actively involved in subsidizing business projects.

The obvious reason that cities, etc. offer incentives is that businesses have convinced them (and you, apparently) that they need to do that, otherwise the business will simply look elsewhere. It's the perfect example of the "moral hazard" I mentioned.

Projections are inherently uncertain, and often wrong, so I wouldn't rely on them much. Your library example is a good one - if/when the number of people expected to use the library is much greater than the actual amounts, the money spent on expanding has been wasted.

$14 million/month isn't enough for our city budget? Where's the money being spent now? Why do we need more? Etc.

I'm not sure unemployment is that much different. The federal government makes policies all the time, using tax codes to encourage business activity that thereby reduces the risk of unemployment. I'd be willing to bet the state does as well.
But you didn't address my belief that by not taking a risk, all Lawrence is doing is forcing other government entities to assume other risks. Risk is everywhere at all levels and passing the buck to someone else doesn't reduce that risk. In fact, it could be argued that when evaluating risk in Lawrence, Lawrence is in the best position to make good decisions. Passing the buck will lead to less than good decisions, in my opinion.
Projections are inherently uncertain, as opposed to what? Shall we flip a coin? Are there better tools out there? Or should the city build no libraries, no schools, do nothing?
Is $14 million/month enough? I have no idea. I know that everyone who gets a dollar wants another. And they make compelling arguments why they should get another. But remember, an empty lot or a vacant store pays a certain, low amount to the city. A developed property pays more. Tax breaks given will not yield less than the vacant lot would, nor will it be less than the vacant store. It will delay the full valuation.

They kick back taxes, Lawrence also gives 1%, Many TIF projects greatly increase area property values because they were meant as a mechanism to help develop blighted areas. Kansas City Kansas, the Racetrack area is a great example of the intended use. I agree the project might be good, Recent studies have shown that the "kickback" of property tax has resulted in a decrease in total taxes collected. Maybe there is a long term benefit, I don't know. There be more proper ways to assist these connected developers, cities need developers because they do, well, develop!

If TIF is such a great thing why not extend it to everyone? I really want to build a new 5,0000 sq ft dream house on a vacant lot. It will create lots of jobs and increase the value of the surrounding property. Give me 10 years off from paying property tax and I will build it. I'll even put a rock park on part of the property for public use. What do you say Lawrence?

The HRC isn't going to approve this, either. They've already stated that any project on these lots has to be done on the same scale as the Arts Center, which would likely mean no more than three stories on NH, and two stories on the alley.

So the the final decision will still likely be made by the city commission.

Here's a potential compromise-- four stories on NH, two stories on the alley, and a skywalk that will tie this building with the latest one proposed across the street. The restaurant could be on the fifth floor of that building on the NE corner. I don't see any reason why the functions of the hotel, restaurant and apartments couldn't be spread across the two buildings, and thus allow a more appropriately sized development on the SE corner.

Just to be clear, the article said city commissioners indicated the project was moving in the right direction. Not that I, the author of the article, thought it was moving in the right direction. Why would anybody even care what I think? The article then leads with a quote from the mayor that makes it pretty clear he thinks the project is moving in the right direction. You don't have to agree with that assessment, but that is a disagreement between you and the City Commission. It is not biased reporting.
Thanks,
Chad

Yes, we need these buildings because the economy is bad and we are desperate for more high paying jobs in Lawrence. There is a glut of unemployed waitresses, dishwashers, and maids all waiting for another hotel/restaurant to be built. And don't forget the hundreds of shoppers this will bring to downtown. People who if they were staying at a Holiday Inn or living in an apartment off 23rd street would have never visited or spent any money downtown. Who wants a downtown with character and charm when what we really need is more tall apartment buildings to solve our economic problems.

I would love to live downtown and the more people down there the livelier it will be. As far as the east lawrence historic district? wth? Most of those homes over there are dumps. Clean up your yards folks and learn how to use a paint brush. Most of those homes would get zoning citations in Baldwin. If you want to protect your historic district try cleaning it up first!

Flooding this market may not make sense either. Recently it was noted that low interest money was a culprit involved in the "boom town economy" that failed the world economy. Why and how? Because both lenders and borrowers show no restraint thus encouraging reckless activity
not only with lenders but also developers.

Case in point:

Retail chains are cutting back.

America is Over Stored

America Is Over Stored ( Do Lawrence,Kansas planners,Chamber of Commerce and city government not realize this?)

The Wall Street bankers boom town economics building frenzy produced a bumper crop of new retail space. But the occupants haven't materialized.

The carnage in retail hasn't been this bad since an anarchist bombed Chicago's Haymarket Square in 1886. In January, Liz Claiborne said it would shutter 54 Sigrid Olsen stores by mid-2008; Ann Taylor announced that 117 of its 921 stores would be closed over the next three years, and Talbots axed the Talbots Men's and Talbots Kids concepts and 22 Talbots stores. Even Starbucks has scaled back its yearlong saturation-bombing campaign.

But back out inflation and sales of gasoline, and retail sales fell in real terms in the past year. Clearly, demand is down And supply is up.

Pulitzer Prize-winning journalist David Cay Johnston joins us to talk about his new book, "Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (And Stick You with the Bill)." Johnston reveals how government subsidies and new regulations have quietly funneled money from the local poor and the local middle class to the rich and politically connected.
http://www.democracynow.org/2008/1/18/free_lunch_how_the_wealthiest_americans

Thursday radio news revealed that nationwide property values continue to decline. No doubt in Lawrence there are still plenty of homeowners and some commercial property owners that still owe more than properties will bring. A product of reckless borrowing and lending.